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[Dallas Tex]

Kids should do what the wealthy do. They form a corporation and the corporation enrollss college and borrows money. The student is merely an employee of the corporation there to perform the work on behalf of the corporation. If after graduation, the corporation can not service it's debts, the corporation declares bankruptcy and defaults. The student fortunately, is just an employee, so he is free to leave and look for a new job with no consequence.

Glenn. Moral Hazard is very real, but in our present system, it only applies to the poor.

I believe i understand your point and probably agree with 99% of it.

'We' as a country should never offer a teenager a loan that everyone involved on the front end transaction knows will end in personal tragedy. And that tragedy remains the on the student....not the school or the lender.

The only flaw that I find in your example is that no bank would lend that 'corporation' any money. That is sort of a system 'fail safe'. Sort of like if I try to take a loan for a $400K supercar, unless the government guarantees that loan, no bank would make that loan. The student-loan process has no such 'fail safe'. And it is non-dischargeable for the borrower.

I'd like to see schools make these loans to their students and live/die by the success/failure of their graduates. Sort of making the schools stand behind the product they are selling and also making schools feel the pain when a loan can not be repaid.

[Dallas Tex]

So what's the alternative? Not go to college?

There are a great many lucrative careers that don't involve college. But if you your career direction leads you to a degree, show some personal responsibility and do the absolutely most rudimentary calculations on the front end to ensure that the degree you obtain will earn enough to pay off the loan you purchased it with.

Personal responsibility? Get outta here with that nonsense.

Yeah. Wow. Gee whiz. Let someone else clean up your mess.

I predict that a 'helicopter government' will have no more success than 'helicopter parenting' does.

[theflashunc]

There are a great many lucrative careers that don't involve college. But if you your career direction leads you to a degree, show some personal responsibility and do the absolutely most rudimentary calculations on the front end to ensure that the degree you obtain will earn enough to pay off the loan you purchased it with.



Yeah. Wow. Gee whiz. Let someone else clean up your mess.

I predict that a 'helicopter government' will have no more success than 'helicopter parenting' does.

Completely missed my point. Two thirds of jobs today require at least some form of college degree. If you're cutting off 2/3rds of all possible job opportunities, seems you're cutting off a "great many lucrative careers" period.

Even the most basic state college is ridiculously expensive. This isn't about Harvard being pricey, but even your land grant schools are ludicrously expensive these days.

This isn't letting someone else clean up your mess. This is all of us cleaning up the mess we all created through stupid, shitty policy when it comes to education.

[vertical_doug]

I believe i understand your point and probably agree with 99% of it.

'We' as a country should never offer a teenager a loan that everyone involved on the front end transaction knows will end in personal tragedy. And that tragedy remains the on the student....not the school or the lender.

The only flaw that I find in your example is that no bank would lend that 'corporation' any money. That is sort of a system 'fail safe'. Sort of like if I try to take a loan for a $400K supercar, unless the government guarantees that loan, no bank would make that loan. The student-loan process has no such 'fail safe'. And it is non-dischargeable for the borrower.

I'd like to see schools make these loans to their students and live/die by the success/failure of their graduates. Sort of making the schools stand behind the product they are selling and also making schools feel the pain when a loan can not be repaid.

You are taking it too literal. Another way to think about it is 'Borrow a little and it's your problem. Borrow a lot, and it's the banks problem' . Same moral hazard, but treatment is different.

Do you think for a moment if the 737 Max remains grounded, Dreamliner orders continue to slow, and airlines demand 10billion in compensation for their unuseable MAX fleets, the US Government will not bail out the company?

Moral Hazard

[JJohnson]

I think it's pretty selfish to borrow 300 grand to study 17th century Russian poetry at Oberlin* and think it's ok for strangers to pay it back for you. I agree there should be a push for a better future, but there has to be a sensible way to restructure student debt in such a way that good choices are rewarded and impractical behavior is discouraged. Warren is desperate, and this issue panders to two crowds: the young indebted and their parents.

Warren is desperate, but she's not the originator of the idea (or really any of her platform, really). What's a sensible proposal? You have employers stating employees need a degree, loan services willing to give anyone a loan (seem familiar?), 18 year old kids not knowing any better taking out loans... We're talking about secondary education institutions taking advantage of predatory lending institutions taking advantage of desperate kids spoonfed the belief that they need a college degree to get by. How do you restructure that besides saying, "You cannot do this. You cannot exist anymore. This debt no longer exists," and banishing the loans to Mordor?

[Dallas Tex]

Even the most basic state college is ridiculously expensive. This isn't about Harvard being pricey, but even your land grant schools are ludicrously expensive these days.

I couldn't agree more. Absolutely correct. Just off the top of my head, I'd say the availability of the funds (loans, etc) has a role in driving the cost increases.

The concept of absolutely free concerns me in that we already have plenty of kids taking out $200K in loans to extend childhood & accomplish nothing. Could you imagine if universities were absolutely free? Seems like that could be a problem. Just my humble opinion.

[Dallas Tex]

Warren is desperate, but she's not the originator of the idea (or really any of her platform, really). What's a sensible proposal? You have employers stating employees need a degree, loan services willing to give anyone a loan (seem familiar?), 18 year old kids not knowing any better taking out loans... We're talking about secondary education institutions taking advantage of predatory lending institutions taking advantage of desperate kids spoonfed the belief that they need a college degree to get by. How do you restructure that besides saying, "You cannot do this. You cannot exist anymore. This debt no longer exists," and banishing the loans to Mordor?

I'd think before even considering banishing existing loans to Mordor, we must stop the inflow.

I always like to stop the bleeding before trying to repair the damage.


[QUOTE=JJohnson;986927].. We're talking about secondary education institutions taking advantage of predatory lending institutions taking advantage of desperate kids spoonfed the belief that they need a college degree to get by./QUOTE]


This is the origin of the disease. Well said.

[mzilliox]

[QUOTE=Dallas Tex;986933]I'd think before even considering banishing existing loans to Mordor, we must stop the inflow.

I always like to stop the bleeding before trying to repair the damage.

.. We're talking about secondary education institutions taking advantage of predatory lending institutions taking advantage of desperate kids spoonfed the belief that they need a college degree to get by./QUOTE]


This is the origin of the disease. Well said.

Since we are talking about lending, isnt the solution to predatory lending government regulations? and do we not currently have an admin that is deregulating these institutions? so is the current admin making this situation better or worse? what about low fed rates making money too cheap to borrow, adding disincentive to save? does it matter?
https://www.nytimes.com/2019/02/12/o...pgtype=Article
Opinion | There’s Only One Way to Stop Predatory Lending - The New York Times
or am i mistaken?

[caleb]

We could do the vast majority of the reform necessary to the student loan system in a few simple steps without going full-on "free college":

- Require states to match Pell grants.

- Cap the percentage of an institution's budget that can go to non-academic expenditures. There are well known non-profit institutions where <10% of the budget is allocated by the Provost. People would be shocked if they saw just how little of the budget goes to teaching at many four year schools.

- Eliminate co-signed student loans. The loan needs to be the responsibility of the party with the credit.

- Eliminate all Federal graduate student loans. If going to grad school is a good financial bet, let private banks fund them and bear the risk with no special loan terms. The unlimited GradPlus loan is providing a perverse incentive right now for institutions to proliferate master's degrees of questionable value and driving the number of people with very high balances.

- Make Federal student debt dischargeable according to standard bankruptcy rules after seven years.

"Free college" sounds great on the campaign trail, but the system is straightforwardly reformable to promote efficiency and stop saddling students with huge debts.

[Christian Fox]

Warren is desperate, but she's not the originator of the idea (or really any of her platform, really). What's a sensible proposal? You have employers stating employees need a degree, loan services willing to give anyone a loan (seem familiar?), 18 year old kids not knowing any better taking out loans... We're talking about secondary education institutions taking advantage of predatory lending institutions taking advantage of desperate kids spoonfed the belief that they need a college degree to get by. How do you restructure that besides saying, "You cannot do this. You cannot exist anymore. This debt no longer exists," and banishing the loans to Mordor?

You restructure it with a waterfall system of progressively lower interest rates, down through zero to outright loan forgiveness, based on your degree and what you are doing with it. The almighty government can base the rate/forgiveness schedule based on what vocations the country is in need of. Anyone willing to grant the Gov the ability to administer single-payer healthcare ought to have faith that the Gov can figure that out. State and trade schools should have priority to the lowest rates and/or forgiveness awards to reward students who made economically practical choices.

[bcm119]

.....

I thought the guy that confronted Elizabeth Warren had it dead right. Dude in the example, and his kid, busted ass to pay for school and stay out of debt. Why should his buddy, and his buddy's kid, who earned more but spent & lived frivolously be rewarded with cancellation of debt, making their education free????????

....

Because if you busted ass to provide for your kid so he could have a better life, presumably it's also in your best interest to make sure your kid doesn't grow up in a society where young people are drowning in debt, unable to support a thriving economy. You have choices here, one is to act on your emotions (I'm pissed I had to bust my ass so I want others to suffer the consequences of shirking their responsibility) or take a deep breath and consider what actions would result in the best outcome for society, and thus, your kid.

I have no student loan debt, but I'm surrounded by young people who are drowning in it, despite having high paying jobs. I want their loan debt wiped out right now, so they can start spending that $700/month on other things. The student loan scam was a failure and everyone knows it, so it's time to cut our losses and end the whole thing. It would be a much more durable and sustainable way to boost the economy than the fluff that's boosting the stock market now, and the guy who busted his ass and his kid would benefit too.

[caleb]

You restructure it with a waterfall system of progressively lower interest rates, down through zero to outright loan forgiveness, based on your degree and what you are doing with it. The almighty government can base the rate/forgiveness schedule based on what vocations the country is in need of. Anyone willing to grant the Gov the ability to administer single-payer healthcare ought to have faith that the Gov can figure that out. State and trade schools should have priority to the lowest rates and/or forgiveness awards to reward students who made economically practical choices.

There are a bunch of issues embedded here.

Economically practical is rarely the same as undersupplied. Usually the areas that are undersupplied don't come into equilibrium because pay is low, while the free market is a pretty reliable provider of economically practical qualifications: the market will probably provide us with plenty of software engineers (economically practical, generally well paid), but probably not enough social workers (undersupplied, underpaid). I'd agree with targeted incentives for undersupplied areas, but not for areas with adequate market incentives. After all, the reason for the subsidy is to provide the public with a benefit that would otherwise not exist.

If we're going to disaggregate costs and benefits by field, we'll need to charge differently for different degrees. Currently, most undergrads pay similar prices for their degrees regardless of what their particular degree costs the institution, with the effect of some areas subsidizing other areas across the institution. Anchoring cost of attendance to cost of providing instruction would mean that some fields (e.g. nursing) would skyrocket in price, while some fields (e.g. English) would become much cheaper. This would likely provide a push to students toward cheaper fields (e.g. English, history, economics, math) and away from more expensive fields (e.g. nursing, chemistry, physics, studio art, theater, teacher education/certification).

Trying to push students toward some fields and away from others could very easily backfire.

[JJohnson]

You restructure it with a waterfall system of progressively lower interest rates, down through zero to outright loan forgiveness, based on your degree and what you are doing with it. The almighty government can base the rate/forgiveness schedule based on what vocations the country is in need of. Anyone willing to grant the Gov the ability to administer single-payer healthcare ought to have faith that the Gov can figure that out. State and trade schools should have priority to the lowest rates and/or forgiveness awards to reward students who made economically practical choices.

Favoring degree fields is the quickest way to flooding a market and devaluing said degree... You're also weighting "economically practical" based on what? Potential income? So you'd get less teachers and continue the dumbing of Americans, for example. Single-payer healthcare and education availability both provide a net positive for the US economy.

[Dallas Tex]

[QUOTE=mzilliox;986935]

Since we are talking about lending, isnt the solution to predatory lending government regulations?

Or simply stop guaranteeing student loans. I'd have no problem whatsoever with more regulation on government guaranteed student loans. I can't see why there isn't much more already. Giving a teenager $200k with basically zero follow up is near criminal imho. Even someone that gets a bank loan for a small business is required to meet certain financial covenants and is audited repeatedly to ensure those covenants are not broken. I'm pretty sure on student loans you get a 'good luck' & bye bye.


and I have no idea how I messed up the quote, that should say quote mzilliox.

[Christian Fox]

Favoring degree fields is the quickest way to flooding a market and devaluing said degree... You're also weighting "economically practical" based on what? Potential income? So you'd get less teachers and continue the dumbing of Americans, for example. Single-payer healthcare and education availability both provide a net positive for the US economy.

No, not potential income. I wrote aid should be weighted based on occupations the country needs (like teachers), and that students who choose "economically practical" schools, like state schools or trade schools, should be further subsidized. I don't think there should be any public incentive for kids to go to expensive, private schools. There is no need for it; private schools give away free rides all the time to smart kids who can't otherwise afford the school. I know a number of kids who have only applied to private schools because it will be cheaper (or free) than their state's public school.

[JJohnson]

No, not potential income. I wrote aid should be weighted based on occupations the country needs (like teachers), and that students who choose "economically practical" schools, like state schools or trade schools, should be further subsidized. I don't think there should be any public incentive for kids to go to expensive, private schools. There is no need for it; private schools give away free rides all the time to smart kids who can't otherwise afford the school. I know a number of kids who have only applied to private schools because it will be cheaper (or free) than their state's public school.

Either way, I think my point still stands. Pushing students towards specific schools or degree programs will eventually flood the market and depress wages while creating eventual serious needs in other professions left behind. Also, some of the country's most desperate occupations are low-paying (social work as example used earlier).

I agree that private or for-profit schools are entirely unnecessary.

[mzilliox]

Mike Pompeo Won't Say If He Owes Apology To Ex-Ambassador To Ukraine Marie Yovanovitch : NPR

[mzilliox]

I really enjoy Thomas Friedman
Opinion | How to Defeat Trump and Catch a Frisbee - The New York Times

[guido]

Opinion | What if It Were Obama on Trial? - The New York Times

[guido]

The Last Time Democracy Almost Died | The New Yorker